Business Directories

Tata shifts Nano plant to Gujarat

Mumbai, October 8, 2008

Tata Motors will make its ultra low-cost Nano car in western Gujarat state, chairman Ratan Tata said on Monday, days after India's top vehicle maker pulled out of West Bengal because of violent protests.

The plant to be built at Sanand, near Ahmedabad, will be located on about 1,100 acres, and have an initial capacity of 250,000 units, which can be expanded to up to 500,000 cars per year, Tata said.

Tata Motors, which had planned to launch the Nano around this month, will in the meantime explore the option of making it at existing units in western Pune city and northern Pantnagar.

"We lost a lot of time unfortunately, and I think we can try our best to do what we set out to do in a new home," Tata said.

"It will be our endeavour to be as close to the timelines we set earlier (but) we may not have the volumes initially."

Analysts have said the company, which had invested about $350 million in the West Bengal site, could roll out hundreds or a few thousand Nano cars initially from its existing facilities.

Tata did not give financial details, only saying the agreement with Gujarat was "slightly better" than the one with West Bengal, and that the company would not incur "any significant losses" from the relocation of the plant in the year to March next year.

"We will be retrieving most of our Singur cost," Tata said.

"The expectation is there won't be any more disruptions or delays," said Vineet Hetamasaria, auto analyst at B&K Securities.

"They can have a plant up and running in 7-8 months, and do a limited rollout," he said.